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Paying More for Less
May 19, 2005

House & Senate Democrats Call on Conference Committees to Stand Up for School Kids, Not Wealthy Property Owners & Insurance Companies

Written by Senator Eliot Shapleigh, Press Release

(Austin)//Key House and Senate Democrats today urged the House-Senate Conference Committees on school finance and taxes to do what is right and put more money into our children's schools.

At the beginning of the session, a Texas Poll showed that four out of five Texans -- 80 percent -- wanted the state to spend more money on public education. Unfortunately, the hopes of Texans have been ignored in the debate. The House-Senate Conference Committees are now debating plans that will raise taxes on the vast majority of Texans, provide big tax cuts for the wealthiest Texans and insurance companies, and provide virtually no new funding for Texas schools.

"Our message today is very clear," said Representative Jim Dunnam, House Democratic Leader. "We want the conferees on HB 2 and HB 3 to do what is right for Texas families and prioritize the education of Texas children over massive tax cuts for only the wealthiest Texans. We want more money for public education. In the House, we offered a plan that gave homeowners bigger tax cuts and put $2 billion more into our schools, but the leadership forced reluctant Republican Members to reject it."

"Property taxes go down a few cents," said Senator Eliot Shapleigh (D-El Paso). "Sales, car, beer, and businesses taxes go up. After the shift, 10 percent at the top get tax cuts; 90 percent of the rest of us get tax hikes. And the school children of Texas get an I.O.U."

On the tax side, of the $7 to $11 billion in tax increases in the two Republican tax plans, only Texans who earn more than $100,000 per year will see any significant tax savings; everyone else will face one of the largest tax hikes in Texas history. On the school side, after inflation and enrollment growth is taken into account, virtually no new money is invested in Texas school kids. Worse still, neither Republican education plan makes up ground lost after over $3 billion was cut from state public education funds last session.

"After all the talk about equity and 'reform,' what we have are two bills which will give a tax break to the wealthiest Texans while widening the gap between rich and poor school districts," said Senator Gonzalo Barrientos (D-Austin). "The irony is that we’re asking poor and middle class Texans to pay for it! I think most Texans can’t afford any more Republican 'reform'."

"The leadership's insistence on giving priority to tax cuts for the wealthy instead of providing resources for our schools flies in the face of what most Texans want," said Coleman. "The people gave us an assignment: increase state support for public schools. Instead, Republican leaders have cut programs to help students and campuses with the greatest needs, setting them up for failure so they can turn them over to private managers who only care about making a profit off of our kids.”

The House Republican tax plan imposes new taxes that will punish middle-class Texans, kill jobs, and penalize hard-working small business owners. House Republicans have already voted to tax net income, jobs, payroll, compensation, capital, earned surplus, bottled water, billboard advertising, car repairs, car washes, cigarettes, and snack foods, just to name a few. The Senate plan, while not quite as sweeping, raised Texas' sales tax -- already one of the highest in the nation -- from 6.25 percent to 6.75 percent and tacked a new tax on beer, wine and spirits.

The centerpiece of both Republican tax plans is a 'pick your poison' provision that will devastate small business owners across the state and has been called a back-door income tax by groups on both sides of the political spectrum. According to the most recent tax equity note, under the House Republican tax plan, the finance, insurance and real estate industries will reap the largest rewards -- $953.2 million, or a 12.2 percent tax cut.

"Under both the House and Senate plans, the vast majority of Texans will end up paying more for less," said Senator Rodney Ellis (D-Houston). "We cut taxes for people living in big, fancy homes like me, raise taxes on everyone else, and then don't invest any real money in our kids' schools. We go from Robin Hood to robbin' everyone and, in the end, our kids won't see a dime in new money."

"The $11 billion Republican tax bill will not teach one more Texas child to read, build one new classroom or pay for one more qualified teacher," said Representative Pete P. Gallego (D-Alpine).

House leaders observed that the House-passed HB3 tax plan would have made the Texas sales tax the highest in the country, while the HB2 education plan drew strong opposition from educators because unfunded mandates, coupled with inadequate funding, would tie the hands of local school districts.

The legislators said the rejection of proposals to provide more resources for our schools, coupled with an insistence on rewarding only the wealthy few with a net tax cut, shows clearly that the vast majority of Texans have been shut out of a process that catered to only a select few, as evidenced by the make up of the conference committees.

"The leadership has turned ‘Robin Hood’ upside down," said Senator Mario Gallegos (D-Houston). "My people, the people I represent, who live from paycheck to paycheck, will now be forced to pay more, so rich families can pay less. They’re asking struggling families, who are literally living hand to mouth, to dig deeper. They want to place the burden on the underemployed, unemployed, and those whose children they already cut off from their health insurance, so that the downtown executives can get a tax cut. Where I come from, that's dead wrong."

"Under the Republican Leadership's plans, the people I represent will pay someone else's fair share of taxes and pay more to help make wealthy schools even wealthier," said Representative Senfronia Thompson (D-Houston). "They ought to be ashamed to pick the pockets of our school kids to give tax cuts to rich people and insurance companies."


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